Yahoo founder: No sacred cows

By Emma Thelwell, Online City Reporter

10:40AM BST 18 Jul 2007

The co-founder of Yahoo! has sought to reassure shareholders that the struggling search engine does have a recovery plan.

Jerry Yang, who took the helm as chief executive of Yahoo! last month, told analysts that: "I am very aware of the challenges we face. There is a significant gap where we are today and where we need to be."

Mr Yang added: "I intend to spend the next 100 days or so focused on mapping out a strategic plan. There are no sacred cows."

The comments came after Yahoo! revealed that profits dropped 11pc to $161m (£80.5m) in the second quarter, even as revenues rose 11pc to $1.24bn.

In a further blow to shareholders, the group lowered its forecast for revenue, excluding payments to advertising affiliates, to $4.89bn-$5.19bn for 2007. It had previously expected it to be $4.95bn to $5.45bn for the year.

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Susan Decker, president of the company, sought to assure investors: "We are operating with a greater sense of urgency in order to create meaningful value for shareholders and to drive growth in the future, we will aggressively look at all opportunities to allocate our capital and talent in the most effective ways."

Yahoo! has been grappling with slowing revenue growth and losing market share to Google.

Rival group Google, the leader in search and pay-per-click advertising, is expected to show at least four-times-faster revenue growth in its own quarterly report tomorrow.

Mr Yang outlined three priorities for the group: to help advertisers gain insight into Yahoo customer interests, create a more open technology platform for Internet users and forge more partnerships, such as last year's deals with eBay and Comcast.

The group's shares shed $1.13, or 4.1pc yesterday. Yahoo! has seen its share price drop around 30pc since the start of 2006.